Operation Of Medium Sized Fashion Company In Turkey Economics Essay

Given the chance to put up a works in Turkey, this study provides an rating and analysis of the environment and civilization which are most likely to act upon the operation of a moderate-sized manner company in Turkey. In relation to the concern environmental rating, legal, political, technological, economic and societal environment are five chief elements which are being carefully taken into considerations and analyzed. As to the civilization, state, societal construction, faith, linguistic communication and instruction are the cardinal elements which are of concerns. Figure 1 demoing the population distribution in 2009 can be found in the appendix. ( Turkish Statistical Institute 2009 )

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Consequences of informations analyzed show that the there are ambiguity and vagueness which are the uncertainnesss under the legal system. Political environment is unstable which caused deflation of lira and high involvement rates. Economic environment is unfavorable for investing as there is disparity between the rich and the hapless. As to the technological environment, rapid growing of the communicating system and cyberspace web provides a convenient manner of information transmittal. For societal environment, labor costs are by and large low which is an advantage for the operation of concern. On the civilization issues, the bulk of the population are Turkish and there is sex favoritism. Most of the citizens are Muslim and the official linguistic communication is Turkish. An eight-year compulsory primary instruction is provided by the authorities free of charge.

This study finds that Turkey is presently non an ideal state for our company to put in and there are assorted inauspicious factors or menaces in the state which are unwanted for investing and can besides act upon the growing of our manner company. Therefore, our program to put in Turkey should be declined.

Introduction

As a moderate-sized Gallic based manner company, we have to confront assorted challenges and competition in the competitory environment. In order to get by with our diversified development and concern enlargement, abroad enlargement is one of future schemes in our concern development program to heighten our fight in the industry. The undermentioned analysis on the concern environment and civilization helps us in finding whether a works should be set up in Turkey.

Environmental Analysis

Turkey is a state with an integrating of western and eastern traditions and environment. Features of the legal, political, technological, economic and societal environment are analyzed below. ( AGUILAR, F.J. 1967 )

3.1 Legal Environment

Since Turkeyaa‚¬a„?s constitution as a Republic in 1923, a steadfast tradition of secularism has been good developed. Legal Framework of the state is under the legal power of its fundamental law. Main philosophy has been laid down by the Government and hence a incorporate and centralised state was established. The official authorities organic structure responsible for the disposal of foreign trade in Turkey is the Undersecretariat of the Prime Ministry for Foreign Trade ( UFT ) .

Under the employment Torahs in Turkey, residence permission and besides a work license from the Ministry of Labour are required before a alien can lawfully work in the state.

The legal construction in Turkey is depicted in several facets, amongst which, judgement procedure is long and decelerate, the protection for minority stockholders is non plenty, there may be uncertainnesss on concern jurisprudence and commercial jurisprudence. These are the issues which may negatively impact investors. This reflects go oning concerns by foreign companies about inordinate bureaucratism, an unpredictable legal system and weak rational belongings protection. ( TURNER, S. , 2002 )

3.2 Political Environment

The President is the caput of State. President is elected by direct elections for a term of seven old ages. Abdullah Gul is now the president of Turkey. Usually, authorities dramas an of import function on the political issues. Political alterations can undeniably impact concern direction.

As capital flight picked up the gait and the depreciation of lira, both involvement rates and rising prices in Turkey became higher and that stopped the advancement of the growing of economic system. The high involvement rates and deflation of the lira led Turkeyaa‚¬a„?s economic system to a speedy impairment. Among the developing states, investing hazard in Turkey is greatly increased. ( Asia Times Online, Gloomy mentality for Turkish economic system )

Political hazard was defined by Wells ( 1998 ) as the challenges faced by investors that result from some kind of authorities action, and sometimes inactivity.

Sing corporate income revenue enhancement, it is applied at 20 % rate on the corporate net incomes which is comparatively on the high side and a barrier for investing.

3.3 Technological Environment

Telephone system has undergone a rapid enlargement and transmutation, particularly with nomadic telephones. Domestically, building new web of bole lines by utilizing fiberoptic overseas telegram to ease telecommunication and cyberspace system, outlying countries can be reached by orbiter system. For international, there are three undersea fiberoptic overseas telegrams installed in Black Seas and Mediterranean Seas which enhanced the international communicating.

Besides the communicating system, transit system has been quickly developing. High velocity railway has been constructed between two chief metropoliss called Ankara and Konya which reduced the traveling clip from one metropolis to the other.

Advanced technological system and substructure can be utilized to supply cyberspace service which can greatly better the efficiency of work in the company.

3.4 Economic Environment

As many employers in Turkey like holding a flexible mode in employment, they usual have informal working relationship with the workers such that the employers can cut down the labor costs. Social security system is non closely monitored, as a consequence, there is an addition in unemployment rates and workers are forced to work without employment contract.

Due to the unregistered employment in the society, there is breach of ordinances in relation to occupational wellness and safety, lower limit pay, working hours, minimal age and overtime. Insufficient trade brotherhood rights result in unregistered employment. Workers are of no bargaining power and have to confront development without the support of trade brotherhood. As the workers do non hold just intervention, i.e. long on the job hours and low wage, a phenomenon appears with an utmost disparity between the rich and the hapless.

If the workers and the citizens do non hold a good wage, they would non hold excess money to pass on vesture and personal adornment.

3.5 Social Environment

Harmonizing to the latest imperativeness release by Turkish Statistical Institute, Turkey has a immature population, half of the population is below the age of 28.8. The average age of the population for males is 28.2 and 29.3 for females. ( see Figure. 1 in Appendix )

This demographic tendency reflects a bad influence in the society. The figure of people in the labour force, i.e. those between 15 and 64 old ages of age is increasing in Numberss while the occupation chances are limited. Unemployment and underemployment may be the jobs.

Analysis OF Cultural Issues

Turkey ‘s civilization is rooted from assorted historical factors which are the important influences specifying the Turkish individuality. Turkeyaa‚¬a„?s civilization is really an integrating of the Western and Eastern civilization with European traditions and besides the Islamic traditions. ( Schneider & A ; Barsoux, 2003 )

4.1 State

Presents, Turkey contains an integrating of the utmost Eastern and Western civilizations as it has undergone a great alteration in the last century

Turkey boundary lines Asia and Europe, with its eastern shore on the Mediterranean Sea. The state stands at a hamlets of civilizations from Europe, North Africa, South and Central Asia.

The bulk of the Turkish population is of Turkish ethnicity. The minorities of the population consist of assorted cultural groups e.g. Georgians, Kurds, Laz and Ossetians, etc. Amongst the non-Turkic ethnicity, Kurds make up most of the remainder and are normally concentrated in the southeast country.

4.2 Social construction

The Turkish population is comparatively immature, more than 26 % autumn within the age of 0 to 14. Life anticipation is at 75.2 old ages for females and 70.2 old ages for males. ( Turkish Statistical Institute 2009 )

Discrimination between work forces and adult females is one of the concerns. Even though favoritism between work forces and adult females is ethically prohibited, in world, adult females normally employed for low quality and low paid occupations in the private company. As a consequence, educational and salary spreads exist between work forces and adult females. This reflects the inequality between both gender and besides the legal system needs to be more comprehensive in order that the favoritism jobs can be solved.

4.3 Religion

Harmonizing to Central Intelligence Agency, 99.8 % are Muslim ( largely Sunni ) and the staying 0.2 % are largely Christians and Jews. ( Cardinal Intelligence Agency )

Turkey is a secular state and there is no official faith. Normally, a Muslim has 5 supplications a twenty-four hours. Before each supplication, the Muslim is needed to clean the organic structure in order that he or she is in pure status.

As most of the people are Devout Muslim, company may hold to supply installations for the staff to pray. It may increase the costs of running the concern and impact the efficiency of the workers.

4.4 Language

In Turkey, the official linguistic communication is Turkish. Kurdish, Arabic, Armenian and Greek are languages other than the official linguistic communication. There are several idioms of Turkish with two chief groups, western and eastern idioms.

As mentioned, Turkish is the official linguistic communication and the citizens may non be able to discourse good in English, the universe linguistic communication. It may be one of the barriers or troubles for foreign investing. In order for non-Turkish speech production investors to pass on with the Turkish speech production people, transcriber and translator need to be employed to make interlingual rendition and coincident reading severally. The costs of engaging a transcriber would increase the costs of the production. ( Jack Scarborough, 1988 )

4.5 Education

Harmonizing to the Constitution of the Republic of Turkey, instruction is free of charge in public schools for every citizen and 8 old ages of primary instruction is mandatory. The purpose for the holding an 8-year compulsory primary instruction is to do certain that every kid has an chance to get basic accomplishments and cognition, accomplishments and holding good wonts as a good citizen. Foreign linguistic communication is normally taught in the fourth category. After holding the 8-year primary instruction, pupils can travel for the secondary instruction.

Most of the secondary schools are owned by the State and free instruction chances are provided. For kids with limited finance ability, high schools with embarkation installations are available free of charge in order that pupils, who are placed in conformity with the consequences of an scrutiny, can be offered equal chances.

Universities of four-year higher instruction schools are founded by Law and their programmes must be on a regular footing certified. Direction is In the universities, the direction is in general in Turkish. English, French and German may besides be the direction linguistic communication in some universities.

Besides basic instruction, Istanbul Moda Academy ( Istanbul Moda Academy ) , a manner college was founded in Istanbul. This establishment is financed and organized by the European Union and several foreign trade associations. It provides and organizes assorted classs in relation to manner and fabric industry.

Decision

In order to spread out to abroad and invest in foreign states, a lodger position should be applied to research the international market. A company has to understand the civilization and concern environment of the mark or the host state.

As analyzed above, there are uncertainnesss on the concern jurisprudence which may do ambiguity and vagueness when there is a difference. The political environment is unstable, deflation of lira and high involvement rates has adversely influenced the investing.

However, the rapid enlargement and development of technological environment is of great aid for the manner industry as paperss and images can be transferred through cyberspace handily. With regard to the economical environment, it is unfavourable for investing as there is inequality between the rich and the hapless.

In relation to societal environment, there is unemployment jobs, it can be considered as an advantage for the company to put in the state as rewards of the labor is low.

As a Gallic based company, we should besides take into consideration the civilization environment in Turkey. Basically, most Turkish are Muslims, they prays 5 times a twenty-four hours which could impact the efficiency of workers and the official linguistic communication is Turkish. Translator needs to be employed to make interlingual rendition.

As to the instruction, there is a manner academy which provides practical classs to assist with manner and fabric industry.

In position of the above analysis, there are more unfavorable fortunes and that we should non see puting up a works in Turkey as there is a high hazard of making so.

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